Eco551. Macroeconomics I. 2022
by G. Ricco (2nd part) and A. Riboni (1st part)
Important references are indicated by (*). There are several good textbooks covering the material of this course: e.g., Acemoglu (2009) and Barro and Sala-i-Martin (2004). See also Aghion and Howitt (2008), Stokey, Lucas and Prescott (1989) and Blanchard and Fisher (2000). Niepelt (2019)'s book is excellent (it covers several macro topics -- it does not especially focus on growth theory).
Homework counts 3 points (out of 20) (return it by Nov21st)
Week 1
The Facts of Economic Growth; Neoclassical Growth Model.
References:
Acemoglu Daron, (2008) Introduction to Modern Economic Growth. Princeton U. Press. Ch 1 (Stlylized Facts) and Solow Model (Ch. 2). Note that in Acemoglu, most of the analysis is in continuous time. See, however, p. 32 (Solow in discrete time) and p. 215
Aghion Philippe (2015) Les énigmes de la Croissance College de France, Leçon Inaugurale slides slides
Angeletos George-Marios, (2013), Lecture Notes, MIT Economics Department. The analysis is in discrete time, as in class. See ch. 3 (*)
Balboni et al, 2020 Why do people stay poor? slides, paper MIT mimeo.
Duflo and Benarjee 2020 Good Economics for Hard Times, chapter 5 (The End of Growth?) is excellent.
Gordon Robert (Rise and Fall of American Growth, 2017), slides, video
Jones Charles, (2015), The Facts of Economic Growth. Stanford University GSB working paper.
Saint-Paul Gilles. (2011) Notes on balanced growth paths
Jones Charles and Peter Klenow Growth and well-being: policy should not be based on GDP alone. A non-technical summary of a great article by Jones and Klenow.
Week 2.
Infintite Horizon, Closed-form Examples, and Transitional Dynamics in the Neoclassical Growth Model.
References:
Azariadis, Intertemporal Macroeconomics, 1993. Phase diagram in discrete time (p. 94-97).
Krueger, Dirk, (2002) Macroeconomic Theory (notes). The analysis is in discrete time. See Ch. 3 (*)
Acemoglu Daron, (2008) Introduction to Modern Economic Growth. Princeton U. Press. Ch 8 (Neoclassical Growth Model) Phase diagrams are discussed on (p. 303). Notice that the phase line "c-constant" is vertical when time is continuous.
Barro R. and X. Sala-i-Martin (2004). Economic Growth Ch. 2 (Ramsey Model). The analysis is in continuous time. Phase diagrams are extensively discussed in Section 2.6.
Week 3.
Competitive Equilibria
PC3 + slides on continuous time
References:
Krueger, Dirk, (2002) Macroeconomic Theory (notes). Very clear discussion of competitive equilibria in an exchange economy, see Ch. 2 (*). CE in the neoclassical growth model is discussed in chapter 3.3 (p. 55).
Stokey, Lucas and Prescott, 1989, (*) Recursive Methods in Economics Dynamics, ch. 2, Harvard University Press
References on Continuous TIme Growth:
Keister Todd, (2005) Lectures notes on Economic Growth (provides nice intution about Hamiltonians)
Barro R. and X. Sala-i-Martin (2004) math appendix See p. 612
Week 4
Inequality
References on inequality:
Atkinson, Piketty T, Saez E., 2011, Top incomes in the long run of history', Journal of economic literature
Barro R. and X. Sala-i-Martin (2004). Economic Growth (*). In class, I did the discrete-time version of section 2.6.7
Bertola, Foellmi, Zweimuller, 2006 Income Distribution in Macroeconomic Models, Princeton University Press. If interested, you can have a look at section 3.1 and 3.1.2 (more general than what we did in class).
Deininger and Squire 1996 A New Data Set Measuring Income Inequality World Bank Economic Review
Jones, Charles 2015, Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality, JEP
Piketty 2014 Capital in the 21st century (Harvard University Press, 2014)
Ray Debraj, 1998, Development Economics, Ch 7 (*) This chapter discusses the model with credit constraints in the slides (section 7.2.8).
Week 5
Public Policies, Government Taxes
Barro R. and X. Sala-i-Martin (2004) Chapter 3.1
Barro, Robert, 1989, The Ricardian Approach to Budget Deficits, JEP
Elmendorf Douglas and Gregory Mankiw, 1998 Government Debt, Handbook of Macroeconomics
Niepelt (2019) Macroeconomic analysis, chapter 11 discusses public policies (optimal policy is discussed in chapter 12)
Ljungqvist and Sargent, Recursive Macroeconomic Theory, MIT PRESS, chapter 10 and 11
Week 6
Structural Transformation, Big Push
References on structural transformation:
Herrendorf, Rogerson and Valentinyi (2013) Growth and Structural Transformation NBER w paper. In class I went over Section 3.2 and 4.1.3 (*). I did not discuss balanced growth -- if interested, the BG of the model in section 3.2 looks like BG in the two–sector growth of section 3.1 (see proposition 1).
Rodrik, 2016 Premature Deindustralization, Journal of Economic Growth. It discusses some of the costs of deindustrialization, not captured by the baseline models discussed in Herrendorf et al.
References on the "Big Push":
Ray, Debraj 2000, Notes for a course in development Economics, See Section 4.4 for the MSV big-push model
Hoff, 2000, Beyond Rosenstein-Rodan The Modern Theory of Underdevelopment Traps, mimeo. A nice overview for those interested in these topics.
Murphy, Shleifer Vishny, 1989, The Industrialization and the big push, JPE.
Krugman, The Fall and Rise of Development Economics, worth reading: interesting and provocative.
Present bias and Intertemporal choices
Laibson et al. (2010) Intertemporal choice, mimeo, Harvard